Top Crypto Exchanges to Buy Bitcoin and Altcoins and Make Your First Crypto Investment

With all the hype that’s been built around cryptocurrencies, people from all around the world are plunging huge sums of money into cryptocurrency exchanges. Many are hoping to become the next Bitcoin millionaire.

But before you start investing, it’s important that you know exactly what you’re getting into.

In this article, we’ll discuss some of the top crypto exchanges and relay the basics of what you need to know so you can go ahead and to the part where you start making money off cryptocurrency.

Cryptocurrency exchange websites allow users to buy, sell or trade cryptocurrencies in exchange for other cryptocurrencies or traditional government-backed currencies.

The whole process can seem daunting at first - especially if you’re new to investing.

But once you get started you’ll realize how simple it really is!

Types of Cryptocurrency Exchanges

There are three different types of cryptocurrency exchanges: trading platforms, direct trading, and brokers.

“Traditional” Cryptocurrency Exchanges connect buyers and sellers who trade based on the current market price of cryptocurrencies. The exchange acts as the middleman and takes a cut from each transaction. Some cryptocurrency exchanges also allow users to exchange fiat currency (such as USD, EUR, or GBP) into cryptocurrencies such as Bitcoin and Ethereum at the current market price.

Direct Trading Exchanges don’t have a fixed market price. Instead, they allow each seller to dictate their own exchange rate. It enables direct peer-to-peer trading for people from all around the world.

Cryptocurrency Brokers allow users to buy cryptocurrencies at the price set by the broker - usually market price, plus a small premium. For comparison, a cryptocurrency broker is considered to be similar to currency exchanges at airports.

How Should I Decide Which Exchange to Use?

Each exchange has different benefits and drawbacks, so it’s important that you take these into account when signing up.

Some things you should consider are:

‍Do they have a good reputation? Are the users satisfied with the service?

Is it beginner friendly? How simple is the user interface? Is it easy to navigate?

Do they have reasonable transaction fees? Do they have fixed fees, or do they take a percentage from your purchase? No one likes paying fees, and avoiding them is actually one of the most appealing reasons to invest in cryptocurrencies. The fees for crypto exchanges will generally be much lower than the fees of traditional banks, but the most trusted exchanges will almost all have fees.

What are their verification requirements? Do you need to confirm your identity by uploading your passport?

Do they have any geographical restrictions? Most exchanges will only be available in certain locations.

What is their exchange rate? Exchange rates can fluctuate a lot depending on the exchange - often by as much as 10%. This is especially applicable for volatile cryptocurrencies.

How secure is the exchange? This is a huge factor that is often overlooked by beginners. If an exchange is hacked, you risk losing all of your investments.

Never use an exchange without thoroughly researching it first - and always check to see if they’ve experienced security breaches in the past.

How transparent is the exchange? Do they provide data about transactions, volumes, and prices?

What cryptocurrencies do they offer? You’ll find that many of the ‘main’ cryptocurrency exchanges will only offer coins such as Bitcoin, Ethereum, and Litecoin.

Many of the websites that allow their users to buy altcoins have less strict KYC (Know Your Customer) rules, as they don’t allow users to trade with fiat money. Instead, you’ll have to fund your account with Bitcoin (that you can buy for fiat money on another exchange and send over to another exchange). When trading altcoins, it is important to note that most altcoin exchanges are not regulated, and you should take caution when using them. If they are hacked or file for bankruptcy, you may lose everything.

Popular Cryptocurrency Exchanges

Coinbase This is one of the most popular and renowned cryptocurrency exchanges in the world. It was founded back in 2012 and has its headquarters in San Francisco. It is considered to be the most beginner friendly cryptocurrency exchange. It is also considered by many to be the best exchange for the most popular cryptocurrencies like Bitcoin, Ethereum, and Litecoin.

Bittrex Bittrex allows its users to trade a much wider range of cryptocurrencies than Coinbase. It supports over 190 different cryptocurrencies, and features many newer tokens and altcoins. It offers fast transactions, high stability, and follows a risk management procedure. It is one of the few US-based altcoin exchanges and has a long history of providing a safe and secure trading environment.

Kraken Kraken is another very popular cryptocurrency exchange. It was founded back in 2011, and despite facing occasional uptime problems, it has many benefits. These include high reliability and a high-security environment, and also high liquidity, low fees, fast funding, and margin trading.

Cex.io Cex.io was established back in 2013 as the first cloud mining provider. It has since become a multi-functional cryptocurrency exchange that is used and trusted by over 1 million users worldwide. It offers its users high security, high liquidity, and cross-platform trading. It also has lower fees, margin trading and features an impressively high uptime of almost 100%.

Coinmama Coinmama is popular for its simplicity. It is easy to navigate and doesn’t require users to already have cryptocurrency to begin investing. Normal cash is accepted. It also covers over 200 countries - more than most other crypto exchanges.

You Should NEVER Store Your Cryptocurrencies on the Exchange

Regardless of which cryptocurrency exchange you use, it is vital that you take extra precautions and that you do not store your cryptocurrencies on the exchange.

As the price of cryptocurrencies continues to surge, it is only natural that popular exchanges will increasingly be targeted by hackers who are trying to steal your money.

This has been an issue many times in the past - and it’s only becoming increasingly prevalent. One of the most notable incidents is the Mt. Gox incident - a hack that resulted in over $460 million being stolen.

To combat this, it is always recommended that after purchasing any cryptocurrencies, you move them out of the crypto exchange and into a secure wallet.